Article

Public Forum:Develop Service Level Agreements

November 2006, Government Fleet - Feature

by Mike Antich - Also by this author

The majority of public sector fleets do not employ service level agreements between the fleet department and internal customer departments. Although these types of agreements are relatively commonplace between commercial fleets and fleet service providers, only in the past 10 years have they begun to emerge in the public sector. One reason for their emergence among government fleetswas a response to the fleet privatization initiatives, in which outsourcing companies made firm performance and cost guarantees to public officials. Those fleets that do employ service level agreementsusually have multiple agreements with different user departments. Service level agreements are most commonly made with fire, solid waste, police, public works, and street maintenance departments.

Servicing the Squeaky Wheel
The first inclination is to initiate a service agreement with your largest customer. However, Jim Wright, president of Fleet Counselor Services, recommends starting with the “squeaky-wheel” department. “Itis usually not your largest customer, rather a small department complaining about high downtime or cost.”

The first step in implementing a service agreement is identifying end-user issues. “You need to document downtime, cost issues, and customer-perceived lack of performance,” said Wright.

Collecting this information over one completed financial period, typically a month, is recommended.“When collecting this information, always ask the customer department to provide documentation regarding such issues as high cost, poor performance, or higher-than-normaldowntime.Ask them to substantiate whatever they can in writing,”said Wright. Conduct a work order analysis to determine the validity of these issues.“ More often than not, these allegations are valid,” added Wright.

Rather than reinventing the wheel, seek to acquire similar serviceagreements from other fleet managers, upon which you can model your agreement. Another alternative is to contact companies such as FleetCounselor Services, which has a 13-page document that covers all service-related contingencies.

A service agreement is not a one-sided document. “For instance, a customer department may cite high downtime with snow equipment during snowstorms. However, a work order analysis may determine that 30 percent of the repairs performed during snow emergencies are caused by operator abuse,” said Wright. “Based on this information, a service agreement may require the customer department to provide operator training and internal certification on snow equipment.”

Service level agreements should be reevaluated every budget preparation season. Service level agreements are living documents that evolve over time. “These agreements will change and vary by customer department, because they are driven each year by budget considerations,” said Wright. “In situations where disputes may arise, there also needs to be a binding arbitration clause incorporated in a service level agreement,” added Wright.

Three Mistakes Made by Fleet Managers
Three common mistakes are made in developing a service agreement. The first mistake is when the fleet manager overpromises to the customer department.

The second mistake is not involving your staff in developing service level agreements. A fleet manager should involve his or her staff in service level agreement negotiations throughout the entire process up to the creation of the final document. The fleet departmentteam should be comprised of representatives from the shop floor, parts department supervisor, financial, and obviously the fleet operation management.

“Many service level agreements fail because the fleet manager didn’t involve the day-to-day supervisory management staff that has to meet these performance standards. Sometimes, downtime standardsare guaranteed to the customer department that the shop simply can’tdeliver,” said Wright.

The third pitfall is creating an issue out of a non-issue. If downtime is not an issue, don’t make it an issue. Don’t make it part of the service level agreement. “When developing a service level agreement, only address those areas where a deficit exists and there is need for improvement,” said Wright.

Benefits of Service Agreements
Are service level agreements worth the time and effort? According to Wright, the main benefits of a service agreement are:

    1. It creates a professional business relationship with a customer department that will spread to other departments, such as finance and purchasing.

    2. The customer department may not know the “rules of the game” and maybe too embarrassed to ask. By being upfront and open, you can start the communication on a positive note.

    3. It assists in identifying cost and performance level prior to the beginning of a new fiscal year.

These are three sound reasons. Let me know if you agree.[email protected]

Click here to see the article

Comment On This Story

Name:  
Email:  
Comment: (Maximum 10000 characters)  
Leave this field empty:
* Please note that every comment is moderated.

FleetFAQ

Public Fleet Tracking And Telematics

Amin Amini from Verizon will answer your questions and challenges

View All

Recent Topics

Do you insure your technicians personal tools? Do you have any policies in regards to technicians keeping a personal inventory of their...

View Topic

Has anyone played with the idea of leasing vehicles' vs. purchasing. And are there any benefits to it. I know Enterprise offers a...

View Topic

Fleet Documents

1055 Fleet Documents (and counting) to Download!

Sponsored by

George Frink joined General Motors in 1966 to help the automaker boost its corporate fleet activity through the GM Fleet Section.

Read more

Blog

FleetSpeak

Thi Dao
Are Your Drivers Safe?

By Thi Dao
It is probable that distracted drivers will not get caught and will not learn anything until something terrible happens. We know it, and they do too, so it continues happening.

Who Tells Your Story?

By Thi Dao

Managing a Police Fleet

Paul Clinton
Police Vehicles Pushed to the Limit in California

By Paul Clinton
The Los Angeles County Sheriff's Department conducted its annual evaluation of 2018-model-year police vehicles from Oct. 10 to 13. Agency deputies got behind the wheel of 13 four-wheel vehicles and five motorcycles for the testing.

2018 Police Motorcycles Tested in Michigan

By Paul Clinton

Next-Gen Fleet

Facundo Tassara
Improved Communication (There's an App for That)

By Facundo Tassara
Slack brings all of your communication together in a way that you can sort. Conversations, PDFs, and documents are all be archived and searchable.

Booster Fuels: Bringing the Gas Station to You

By Facundo Tassara

Driving Notes

Paul Clinton
2018 Volvo XC60

By Paul Clinton
The 2018 XC60 arrives as the mid-size sibling of the XC90 in a stylish update that includes a bevy of new safety features, infotainment tech, and a well laid-out cabin.

2018 Mercedes Benz GLS450 4MATIC

By Chris Brown

Nobody Asked Me, But...

Sherb Brown
Ready or Not, Electrification Is Coming

By Sherb Brown
We’re not where we need to be with battery technology and the whole herd seems to be betting that a magical new solution will appear in time to save us all. I sure hope they are right.

Fair and Balanced

By Sherb Brown

STORE